THE DECISION-MAKING PROCESS

An organization is run by people whose actions are guided by policies or rules created through one or the other decision-making method. In this paper, various decision methods that have been advanced by authorities in business management or related field will be discussed and analyzed. This essay can be used by companies or firms to identify best methods to apply in given situations that occur during their operation. The following report is all based on the book; Mastering Public Administration.

1. Systems Approach

1. External Environment Model

The system approach categorizes an organization into a working joint activity of subsystems. The main features that define a system are components in the organization, linking processes and goals of the organization. External environment model has to do with the interactions of the organization with its environment thus adding it as a component that interacts with the system.

• Efficiency vs. Effectiveness

Effectiveness of an organization is the ability of the body to do a duty with best levels that are crucial to its production process. Effectiveness approach is used by organizations to measure any set of primary relations, with employees to profits. Efficiency relates to how well an organization utilizes its available resources. The main distinction between the two terminologies lies in their application. Effectiveness is an abstract concept whose measurement is relatively hard to capture as it is used to measure any aspect of a business. On the other hand, efficiency is exclusively financial and can only be used to measure this concept thus, it is easy to work with mathematically

• Classical Approach

The classical approach forwarded in three forms by Taylor, Foyler and Weber and focuses on communication as a primary tool for success while running an organization. The key goals involved to create a congruent wholesome successful organization are; Organization identification, Job satisfaction and communication satisfaction

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• Behavioral Approach

This approach focuses on leadership where division of labor ids done to allow for predictions by getting the optimum method to be used for production and the general behavior of humans towards successful or high production in an organization.

II. Classical Approach to Understanding Organizations

1. Max Weber

Weber is known for his work in sociology and in this context, the masterpiece he left to be used as a gauging tool of a perfect condition is the idealtypus (ideal type).

1. Ideal Type

Max Weber identifies his theory to an ideal type of organization in the text but does not refer to one, in particular. It is an ordinary matter to create theories upon a subject that does not possess the unpredictability of the real world. Therefore, an ‘ideal type’ is an abstract concept used to discuss ideas about issues in unclear or unstable environments.

• Rationalization &  Domination Process & Characteristics

 According to Weber, rationalization is the new way of doing things where beliefs are overtaken centered upon efficiency, control, and critical calculation. In this theory, the concept of administration is not guided by principles or traditions in a bid to gain wealth. It is captured in a domination process where power is among a select few who have the say in relatively all matters. Weber had seven principles wit which such a system might be identified or classified with;

 A hierarchical framework where a corresponding level has a controlling authority above it. This structure allows for centralized administration and strategizing. Running on rules, these organizations execute verdict from superiors in a reliable manner at every subjected interval. People in the business are categorized into factions of particular talent according to specialty. The nature of business venture is either focused on pleasing the stakeholder and board members (up focused) or the organization itself such as by making profits (in-focused). Hiring of individuals is purely based on achievements of the candidate, and this increases competence of such an organization. Plus all staff and customers are treated with the same mood, there are no exceptions. Professional conduct is maintained strictly.

• Bureaucracy

This is the powerhouse for running an effective organization according to Weber. However, he recognizes it as a threat to personal liberty. The system where traditions or principles guide running of the organization was kicked out unceremoniously by bureaucracy in what Weber sees as a rationalized move.

•  Critics

Max Weber indicates a relationship between bureaucratic characteristic and rational characteristics that were found not to be true in 1959 by Udy. Also, a typical issue with theories of this era, research was rarely done as for this case, the characteristics were intertwined.

• Fredrick Taylor

Taylor contributed mainly to business management and is known to have introduced the workers ‘uptight’ discipline or soldering.

1. Time and Motion Studies

This study has to do with conservation of resources for the given organization by analyzing the amount of time required for a particular activity to be done effectively in an organization. Time and motion studies include; a wide range of event for the account, methodical analysis, and means of improving work methods that involve creation of material for the use of that information.

• Wage Incentive

This is the wage that is made by organization heads to act as bait to keep their valued workers happy and occupied. Those paid can be paid a little more, give extra jobs or even given fabricated orders to work on. An advantage of the system is that fewer workers will be required to give high production. This suggests that wage systems without are bound to be less productive especially if the employee has a fixed salary.

• Functional organization 

In this mold, a venture is classified into two distinct branches that serve individual purposes but ultimately contribute towards the success of the entire organization. The two factions are; designing the realization of goals by specialists and effecting by charges. Also in the ranks, there is a common individual or department in charge of discipline. Any specialist or charge can give orders to workers who will comply in the same manner to both authorities. In essence, the workers have charge over their superiors in order of functionality. Thus, the Taylor’s Functional Organization.

• Problem inefficiency- Solutions

Inefficiency within the management ruling procedure caused by inadequate policies, low hourly rates, and poorly designed incentives should be curbed with training of workers so that they can improve the delivery within the shortest time possible. However the inefficiencies that are entwined to poor decision-making, that is, using structures such as ‘rule of thumb’ can be eliminated by slowly replacing it with scientific methods. Science offers a more explicit analysis of situations and allows for the best decision to be made.

Fredrick Taylor identified scientific method as the best single system as well as the best performing technique. Inefficiencies within the management control system such as poorly designed incentive schemes and hourly pay rates not linked to productivity can be eliminated by training and development. This way, each becomes more productive and becomes more eligible for the incentives in his specialty.

• Principles of Scientific Management

Hierarchy and rules drive scientific management; every worker is under the inspection of a superior. Some fundamental principles that can be used to identify a scientific management model include; matching up worker to skill instead of giving assignment to them in a random manner. Also, motivation can serve as another incentive to assign work. The two types of workers will guarantee efficiency once properly trained. The use of a monitoring system to check the performance, provide orders and also management to ensure use of appropriate working methods. Finally, allocation of work between managers and workers so that each group spends time working allowing for the other group to work with maximum efficiency.

• Critics

Critics associate this model with exploitation of workers and a problem of unity of command because of existence of too many bosses instead of just one. The mechanical approach is, therefore, not a reliable method because of neglect of the human element. It is based on the erroneous assumption that the motivation of workers is purely financial and employees are not engaged to get a look at what is expected of them later on.

• Administrative management school

1. Principles of Administration

Administrative management is involved with the design and control of an organization. These are the advanced guidelines that help the running of an organization and decision making process.

III. Redirection insights

1. Human relations

1. Elton Mayo – Solutions

Mayo was an authority in social sciences and even after his retirement from lecturing, he continued his work. His legacy falls in the path of human relation which he coined as a journal.

1. 3 Parts

In an organization model, Mayo identified three trivial parts that work in conjunction to achieve overall success. During the Hawthorne experiment, he supervised two of his employees who were acting as managers and they in turn issued orders to the workers who were working on telephone equipment. Thus the three important levels in a organization structure are; the head who may be a single entity or a board, the managers acting as the bridge to the workers and the workers who receive the instructions and abide to them.

• Hawthorne studies

The Hawthorne was a research venture by Elton Mayo (1927-1932). He conducted it with the help of workers, mainly women, working to assemble telephone cabling equipments. The objective was to find out the effect on productivity caused by changes in working condition or change in the environment. Initially, he altered small things such as lighting and later on he changed the working arrangements and carefully studied the implication on their productivity.

He drew a conclusion from the results that, people did not go to work purely for money, there was much more to work than that.

The environment in which the workers were in were such that they interacted freely, and the productivity could not be related to their personal desire but to for the purpose of pleasing their supervisors. This is because the condition of working did not bother them as much as the colleagues with whom they collaborated.

•  Critics

Mayo’s work is criticized for having concentrated on a small isolated group. There is no way of telling that the results can be replicated with a larger sample. His study assumes that man wants to naturally form groups and cooperate.

• Mary Parker Follet – group process

Mary Follet was a phenomenon in business management and even after her death, her legacy goes on through principles and her ideas. A book was made, Dynamics of Administration, containing the account of her work.

1. 3 Parts

Mary Follet understood about control by mastering for essential elements that offered insight into the problem; global situation, constructive conflict and her understanding of coordination. These are fundamental concepts that describe the identification of a problem, how to make the job productive and how to work with what is present in order to make the situation to work for you.

• Conflict

According to Mary Parker, conflict cannot be avoided, it is, therefore, necessary that the organization seeks ways to gain from it. In order for a conflict to resolve out, there have to be three things that one has to occur; domination, compromise or integration. Obviously, domination is disastrous to the weak end of the argument as it happens in wars. Compromise is the most democratic where both sides give something up in order for the conflict to end peacefully and finally there is integration where common ground is sought.

• Integration

Integration is profitable to involved parties, and the first step towards it is pointing out the actual differences. Each side should be allowed to express their desires so that they may be evaluated and ensure no conflict of desire as well. Integration can be hindered by language use in poor attitude and for business it is using the integration as a theory and no acting on it. Finally, there should be avoided manipulation by leaders favoring one side.

• Industrial Organization & Key Concepts

Currently, famous concepts in business can be attributed to her work in the 20^th century. She was the initiator of understanding hierarchical organizations, and she stipulated the importance casual operations in organizations. She nurtured the idea of ‘reciprocal relationships’ and argued that these played a significant role in controlling conflict.

• Critics

Her stipulations that there exists a clean and safe way to exit from a situation carries false assumptions as one cannot correctly foretell the desire of the next party or willingness to cooperate.

• Herbert A. Simon – Decision Making

Herbert A. Simon is recognized mostly for the legacy he left of research into artificial intelligence. His work is  used as a bases to advance critical thinking in computer science.

1. Science of Administration

In this section, Herbert A. Simon came up with the hypothesis of science of administration. He staged; that public administrators cannot remain neutral throughout their career span. This was a challenge to the previously used belief that neutrality was the key to proper administration. He also contested the assumption that managers are good economic maximizers referring to them as ‘satisficers’ who are bound by the three limiting constraints. He put a price on information previously known to be for by classical economists. The price for information is ultimately the attention of the recipient. Thus, a lot of wealth translates into an enormous lack of attention.

He created the concept of bounded rationality where pattern matching is done to arrive at the solution to a problem. He identified that decision makers merely define the problem space upon which the solution is mapped onto. The data to be inserted into that slot is not searched for or created; it is matched.

Simon managed to create mathematical models to describe human behavior. This was a significant milestone as decision-making depends on the efficiency of evaluating other means. He also stressed the importance of managers in pronouncing organizational goals through persuading helpful behavior.

• Industrial Decision Making

He asserted that internal and external organizations of firms did not follow the theory of rational when making decisions. He used industrial decision-making case to further his campaign of bounded rationality, a process that is involved with how the decisions are affected by the process. The easiest way to study such complex issue is through computer simulation, and thus Simon studied computer science especially in the area of artificial intelligence, user interface and other fields that connected machine to man.

Existing knowledge of industrial decision making has been applied in todays businesses t further the quality of decisions made by the executives. Research reports describe processes involved in the action of decision making and offers insight into the possible consequences thus providing advice as to the correct method to use.

• Satisficing

This is a tactic that involves ferreting with the available choices until one that is satisfactory is found. Though this method differs from the ordinary methods of decision-making, it is accurate because it finds the best match for the case being handled. Its primary drawback is strain of time. This concept of satisficing was formulated by Herbert A. Simon, an academic authority in the area of management. He was in the act of explaining his concept of bounded rationality where no conventional decisive tool is applicable. He explained the limitedness of the human brain to optimize and to possibly correctly evaluate the outcome to be expected.

• Bounded Rationality

The Bounded Rationality approach is a concept that seeks to capture a decision-making process that is not achieved by any system. This occurs when the decisions to be made all encapsulated into three constraints that the decision maker has to deal with at all times hence the term, bounded. Regardless of the intellectual competence of the decision makers, the constraints will still be present, hence the need to apply ‘the rule of thumb’ in resolving these issues. These limitations are; limited information as to the many ways to solve a problem and  the consequences that will follow, the human mind’s small capacity to analyze the available information so as to make an knowledgeable decision and finally, the time available for the decision to be made and still be applicable is limited.

• Organizational Decision Making

Herbert A. Simon found that there is uncertainty about costs of getting information right now and future. These uncertainties limit the decisions rationality thus a bound rationality occurs, and the decision can only be made by selecting the decision that is has a chance of not being the best but serves the purpose all the same.

• Critics

The theories are reliable but suffer from too much elasticity, for example, measurement of mathematical equivalents of factors such as efficiency cannot be entirely true just an estimate.

• Douglas McGregor

McGregor introduced the concept of managerial assumptions captured in his X Y theory. He asserted that the belief that workers can achieve by managers or not is what determines the success of an organization.

1. Theory X₁  Y

The theory is modeled after the sex of man, that is, male and female. McGregor stipulated that there are two methods of managing people. X is preferred more but has poor results, but the other method Y is only used by smart managers who get positive results as well as allow growth and development of the people involved.

Theory X is also referred to as the Authoritarian Management Style. This technique is used and has the following characteristic thinking; people hate work and avoid it at every chance, most people must, therefore, be forced to work towards organizational goal sometimes through warning of punishment.

Theory Y is also referred to as Participative Management Style. It has the following characterization; work with effort is natural and a must; people are self-driven in chase for organizational goals without external incentives.

• Contingency Approach

Contingency approach is designed to cater for all types of situations. It does not have a specific methodology of going about any form of problem, organizational or managerial. It believes for the right solution to be found, there have to be considerations situations of varying complexities in the environment that affect the decision factors.
Such matters that are trivial such as technology, organization size or geographical positioning can cause a significant difference in the way a situation is solved or handled in a given business.

Bibliography

Fry, Brian R. 2014. Mastering Public Administration. Washington, D.C.: CQ Press.